Social Media: Boom to Bust?

As Facebook reports its user base has reached 901 million users and acquires Instagram for a staggering $1 billion, industry analysts continue to debate the existence of what is being deemed the “social media bubble.” Some argue that social media is a sign of a burgeoning online community that fuels the economy. Skeptics speculate that this age of social media is reminiscent of the most recent collapse of the housing market and the not so distant .com bubble.

From the mid-90s to 2000, industrialized nations saw a dramatic increase in equity valuation due to the growth of the Internet sector. Venture capitalists pumped millions of dollars into start-up companies led by a young generation of entrepreneurs with big ideas and incomplete business models. The markets witnessed a surge in IPOs with remarkably high stock prices and then experienced devastating losses when the bubble burst.

Not so dissimilar, social media companies, most notably Facebook, are entering the market with incredible valuations. Valuations are being based on the potential buying power of these social media user bases. But is the potential of this large consumer base enough to drive sustainability and stability? News that financial advisors are cautioning clients against social media fund plays may be a sign of what is to come.

There is no question that the industry is experiencing a social media boom, but its fate will no doubt fuel speculations on both sides of the argument. What do you think?

Word Out on the Town

Reputation has always carried heavy importance for businesses across industry. Throughout the last century, customer loyalty was primarily forged through personal interactions that involved a high standard of service blended with consistency. Managing performance and generating new business was dependent on solid reputations and relationships. However, technology is the basis for a large majority of interaction between businesses and consumers. With this shift, the importance of reputation is not diminished; instead, a new standard is being set online.

The internet has accelerated the speed of consumer interactions with brands in dramatic fashion. As one might expect, reputation has become increasingly transient and incredible sensitive. A plethora of online ‘review’ sites populated by communities of customers giving feedback in real time has empowered the voices of consumers. A single bad review of a restaurant can deter other patrons, and a bit of praise can fill the reservation book. Whether from advocates or critics, the instantaneous reporting of customer experience can literally be make or break for a business.

These drastic changes have led to behavioral changes, manifested most strikingly in the form of companies touting themselves as “reputation management firms.” The anonymity that the internet allows by nature has meant that not all customer reviews or ratings are to be believed, and a small number of businesses have turned to gaming the system by eliminating negative feedback and creating fake reviews with the goal of building a strong reputation or repairing one that is damaged.

The reality is disconcerting, but the message is clear: reputation online plays an extremely important role in success within the highly competitive landscape. It is important for owners and operators to understand customer feedback, address concerns, and motivate the large audiences on review sites and in the press in order to turn negatives into positives. Utilized correctly, a robust reputation online can prove to be a massive advantage, vital to the success of any business now and in the foreseeable future.

A Prime Cut of the New Food Business

Eating is a biological necessity. Every human being must eat, but for millions of people nationwide, developments in recent years have placed an increasing emphasis on gastronomy that is healthier, more localized, more gourmet – providing something far beyond mere sustenance. As a result, massive changes in social and economic behavior surrounding this shift are helping the food industry rapidly become very big business.

Everywhere, citizens from all demographics flock to popular new restaurants, farmers’ markets, and other food-related events creating an entire culture of individuals dedicated to seeking the latest and greatest culinary art. The number of these enthusiasts and connoisseurs is staggering and constantly on the rise (the term ‘foodie’ is generally frowned upon, as it is now considered far too general to accurately describe the hundreds of different types of food-lovers) – New York Magazine recently ran a high profile article detailing the emergence of an entirely new class of young people drastically increasing spending on food. These dedicated consumers are fuelling a serious boom in new food industry businesses. New York City alone sees hundreds of high profile openings each year, most of which are highly successful, booked up to months in advance and packed with eager diners every night.

So how has the food industry capitalized on all the excitement of this emergent market? Restaurants, farmers’ markets, specialty foods stores, and more have used digital platforms to springboard to new heights. Through social networks and digital tools, these businesses have fostered the fervor of food-lovers, creating user review websites like Yelp and revolutionary platforms like OpenTable, which offers a fully integrated reservation booking experience. The two sites have even merged functionality, enabling diners to heavily interact with the food business long before and long after any actual eating takes place. Chefs are now celebrities, viewed by many in the same light as prominent athletes or actors, with dedicated ‘fans’ admiring their every move.

The democracy that digital platforms have created for the food industry is beneficial not just to businesses, but to consumers as well. The enthusiasm has led to an increase in the quality and visibility of what was traditionally ‘cheap’ cuisine, and a shift in higher-end, luxury food becoming more accessible – both ends of the spectrum have been more centralized to suit a much larger audience. Food is a common experience for all types of people, and the modern movement is touching eaters everywhere.

The ‘food revolution’ is an example of the power of a world driven by social interaction and fully connected by technology. Using the right tools and strategies, businesses in all industries can leverage commonalities among consumers to maximize awareness and monetize the human experience.

Junction Shares Insights on the Future of Marketing

The role of chief marketing officers (CMOs) is changing almost as quickly as the advancements in technology. The CEO of Junction Creative Solutions (Junction), an Atlanta-based strategic agency, releases Marketing Futurists: Better, Faster, Constant. The perspective applies and adapts the economic principle of better, faster, cheaper to a new marketing model that has transformed the traditional role of CMOs.

“Marketing is often classified as ‘nice to have,’ comments Julie Gareleck, CEO & Managing Partner, Junction. “But in this dynamically changing market place, marketing is a need. The responsibility for marketers, especially CMOs, is to not only deliver the message but also generate a return on investment. Traditional best practices for marketing have changed – the model is different.”

Gareleck offers an interesting perspective for marketing futurists. “The influence of technologies like social media and the surge in real time digital data have given many marketers headaches, but with swift adoption, the same advances provide opportunities for CMOs to change the economics of marketing in a big way,” said Gareleck.

To learn more about Junction, visit www.junction-creative.com.

Less than Oscar-Worthy

Sunday’s 84th annual Academy Awards were not only a golden night for actors, directors, and producers, but also a major event for advertisers. ABC’s broadcast of Hollywood’s biggest night provided a captive audience estimated by Adweek to be made up of nearly 70% women, including a large majority between the ages of 18 and 49, one of the most crucial demographics for advertisers. Despite airtime during the show costing less than half as much as Super Bowl spots, the cost to advertisers per viewer was still higher than the big game, the year’s marquee advertising event. However, the opportunity to reach an extremely targeted audience of more than 37 million people at a reasonably low cost is highly attractive to larger ad spenders such as McDonalds, Samsung, and Coca-Cola.

JCPenney was the evening’s largest spender, marking its 11th consecutive year of advertising the Oscars by introducing its innovative new pricing structure. It aired 5 spots in total, with one main ad featuring Ellen DeGeneres followed by four separate pitches for its new spring line of clothing. The ads, however, lacked the punch of a Super Bowl-type spot. Hyundai, whose Super Bowl campaign was considered among the best, also fell somewhat flat, showing a strange albeit humorous ad that came up short of the bar set by their lauded efforts earlier this month.

Between advertisers coming up short of the mark and the less-than-impressive integration of real time discussion amongst the audience through social media, the 2012 Oscars felt like a missed opportunity. In step with the theme widely speculated upon by the media that the show would suffer from a weak field of films, having no real blockbusters up for awards, there seemed to be no advertising or marketing effort striving to take home the trophies either. Although the Oscars are still without doubt one of the most important dates on anyone’s calendar, 2012’s edition was a missed opportunity.

Social Media is Simply Lincredible

This week, the legend of Jeremy Lin will swell slightly larger. After scoring 136 points in his first 5 starts, the most of any player since the ABA-NBA merger, he became the first New York athlete to appear on the cover of Sports Illustrated for two consecutive weeks. How did an undrafted, unheralded player who had previously been demoted to D-league basketball three separate times and was sleeping on his brother’s couch just weeks earlier earn this honor before Derek Jeter or Eli Manning?

The secret is that Lin’s meteoric rise to fame has been fueled by a social media movement unlike any the world has ever seen. Following in real time with the 6’3” guard’s capture of national attention is a wave of conversation on social networks such as Twitter and Facebook. The hashtag #Linsanity has been widely proliferated throughout the internet, with interest growing during each Knicks game. Mentions of this and other clever puns on Lin’s name even spike specifically after each point scored by the phenom.

No other figure in sports has enjoyed the power of the internet as they make their debut, but it’s not strictly because Lin is just the first star to show up at just the right time. His Taiwanese heritage has mobilized millions of Asian-Americans, one of the most active demographics in social media, to become supporters. Lin is a graduate of Harvard, appealing to fans with a personality that differentiates him from many other professional athletes. He also happens to embody the underdog story of a player who has battled against adversity to achieve greatness. Lin’s broad appeal is a combination of a unique character and the unparalleled ease with which social media can propagate the story.

Still just in its first month, the storied spectacle of Lin’s emergence into the spotlight has had major impact thanks to the buzz. His #17 jersey is now the top seller on the NBA store’s online website, the average price for Knicks tickets has risen nearly 20%, and even the most cynical basketball fans are tuning in again, boosting TV ratings in both the local markets and nationally. After the lockout marred the league’s reputation, Lin has done more to leave a positive impression on not only the NBA, but the entire sporting world.

Lin’s emergence has set a new standard for how news of the next big thing in the sporting world breaks, but the power of social networking extends beyond the realm of sports. Hitting the right points, anyone’s message can now be amplified and carried further than ever before. So, who will be the next cause of Linsanity?